Since the moment Microsoft announced their intention to buy Activision the narrative has always been about Call Of Duty and Game Pass. Will they do it day 1 or not?
While nothing is official yet, it sure seems like the decision has been made, and the answer is yes, yes they will. So now the questions inevitably shift from “will they do it?†To “is it the right decision?†And what exactly is the plan? Will prices be raised? Will there be a new tier added? We don’t have the answers yet, but it’s at least worth discussing the pros and cons to such a decision.
As I’ve talked about recently, I thought Game Pass needed to reset and go to a more PlayStation Plus type model where the their first party games come to the service later rather than day 1. My thinking was Game Pass simply isn’t growing enough to justify losing out on potentially millions of sales.
The Gamble
In theory Game Pass is meant to grow with each new game and that offsets the lost sales. But it simply hasn’t been doing that enough of late. Having said that, they’ve also never had a game quite like Call Of Duty. Sure they have Minecraft and other big games, but those games are typically once every few years. Call Of Duty is the biggest game basically EVERY year.
Naturally this has people online quite divided. People either think Call Of Duty is so big that it will drive millions to the Xbox platform and Game Pass subscriptions will skyrocket. The other side thinks putting it into Game Pass will eat into the sales so much with minimal return that it will be the final nail in Xbox’s coffin. Both responses, while likely a bit extreme have merit and are plausible.
Microsoft and Xbox are certainly hoping for the first to be true. Rightly or wrongly they think Game Pass is the best path forward and will do everything in their power to make so, including risking the biggest game in the worlds sales.
The Risk
This is the part one side wants to ignore. They think if subs and hardware don’t increase it just means they are still selling all the games and no harm no foul. But it’s not that simple.
If this fails Xbox has a massive problem on their hands. If subs don’t grow and all you’ve done is handed millions of already subbed members a new game it could cost them hundreds of millions in sales with no added revenue. And then what do you do? Next year say “sorry no more call of duty on game pass� That would be even more of a PR nightmare than my suggestion of ripping the day 1 band air off now.
The safer play probably would have been keep it status grow this year and see how it plays out. Put Xbox marketing onto everything call of duty related without Game Pass and see what happens. Maybe that alone gives a big boost. If things stay the same then next year you can shift to Game Pass.
The Reward
Now on the flip side there’s the pay off if it goes right. During the FTC trials a document got leaked accidentally that showed us 13 million unique PlayStation users played Call Of Duty in the US in 2021. That’s roughly 2/3 of the user base at the time. But more importantly half of that 13 million either played Call Of Duty exclusively (1 million) or 70% of their gaming time was spent with the game (6 million). You spread that out worldwide and it’s a massive group of console gamers whose main gaming focus is Call Of Duty.
And there lies the pay off. If you can get even 30% of that group to switch to Xbox and sub to Game Pass you are exponentially growing the business. And at first glance you might say if all they care about is Call Of Duty they will just keep buying it at $70 rather than the $16.99 monthly. But when you dig deeper it’s not as big of a gap as you might think considering console gamers have to pay to play online as well. Mind you if the price were to go up the gap of course grows, so a lot of it might depend on the price increase, if there is one.
This is ultimately the thing they must figure out for this to pay off. How do they get people to switch and spend slightly more for what they already have to a group of people that only really cares about that 1 yearly game.
How this plays out will be fascinating to watch. I’m personally skeptical how much it will grow the service but I have an open mind and won’t be shocked either way.
It’s clearly an all in move by Microsoft and Xbox. If they win, they will feel like they are in position to win the game. If they lose they still have enough chips left to be at the table, but they may just be getting ready to cash out and leave.
